If your first thought when hearing the words "business plan" is "yuck", then you're not alone. For most…
If your first thought when hearing the words "business plan" is "yuck", then you're not alone.
For most people, the thought of writing a business plan brings up painful memories of past homework assignments and many online store owners view them as something only "real world" businesses and Silicon Valley startups need.
And lets face it, there's all that fun marketing stuff you could be doing like taking product photos, writing blog posts and opening social media accounts.
But the truth is, the fun stuff will only be meaningful if you build your business on a strong foundation.
And that's where writing a simple business plan comes in.
Why You Need a Business Plan
Even if you don't actually need funding for your business or need to submit a business plan to anyone, there are still some compelling reasons you should consider writing one for yourself.
For example, let's say that you're just starting out. You've created an online store, you may even be making some sales. Creating a business plan at this stage could help you see the bigger picture and chart a strategic course for future growth.
Or maybe you're five years into running your business and you're starting to feel stuck and things are beginning to plateau. Creating a business plan at this stage could help you think outside of the day-to-day grind of running of your business and discover new ways to market it or new products you could be selling to boost revenue.
On the flip side, maybe your business is trending downward. Creating a business plan in this scenario could potentially help you either change the way your business works as a whole or cut your losses before you're in deeper trouble.
The point is, if you haven't written a business plan, you should take the time to do so, no matter what point in your business's lifecycle you're in.
And the best part? It's not that hard.
Let's look at how you can do it.
Components of a Good Business Plan
Remember, if you're just doing this for yourself, there's no need to go overboard and turn this into a major project that holds you back from launching and making some initial sales. Think of it as something designed to help open up some ideas for your business and shed light on some angles that maybe you haven't thought of yet.
In the future, if you actually need to submit a formal business plan to someone, you could always use this one as a starting point and spruce it up as opposed to having to start from scratch.
The key areas of a business plan include the following. Find out how defining each can help your business.
Executive Summary - While it's the last thing you will write, it's the first part of the business plan. This part summarizes the main highlights of the rest of the sections.
Company Description - This is a high level overview of your company, products or services, types of consumers, and competitive advantages. Ultimately, think of it like what you would tell someone in an elevator ride about your business if you wanted them to invest in it. Also known as an extended elevator pitch.
Market Analysis - This is your research about your industry and target market. If you haven't formally defined your target customer, this will help you do so.
Operational Plan - This covers the day to day operations of your business, from location and hours to inventory and accounting. As you go through this, you can make sure that each of the vital processes in your business are running as smoothly and efficiently as possible.
Organization & Management - This tells people about the main players in your business - who owns it, who manages it, etc. It will help you define all parties involved with the foundation of your business so everyone has a clear understanding of where they fit and who does what.
Products & Services - This is where you describe the products and services offered by your business. You should think about them from your customer's perspective. It will help you to better sell your products and services once you've defined them using this approach.
Marketing & Sales - This is where you layout how you will reach your target market, identify prospects, and sell your products and services. While composing this section, creative marketing and sales strategies might emerge.
Financial Projections - This is where you really dig in and figure out how much your business will make over the next five years. As an established business, you will include historical data and be able to make your predictions based off of that. Coming up with these numbers could be a huge motivation boost and keep you working towards a specific goal as opposed to just seeing what happens.
Funding Request - This is the part of the plan where you define your outside funding needs and exactly how you plan on using those funds as well as pay them back. Even if you're just investing your own money into your business, this can help you really focus your spending so it is all allocated and documented properly.
As you can see, creating a business plan can be a huge eye-opener for your business, no matter what stage you're at.
Business Plan Templates & Resources
Fortunately, there are a lot of great resources on the web that you can use to make the business plan writing easier. Best of all, many of them are free. Here are just a few.
- SBA Create Your Business Plan - This guide walks you through each section of your business plan with all of the details you need to craft them. They also have a Business Plan Tool that will walk you through the process, step by step.
- SCORE Business Plan & Financial Statements Templates - Fully detailed sample templates for start-ups, established businesses, and non-profits.
- Sample Business Plans - Over 500 sample business plans for various industries including restaurants, retail, medical, health, services, fitness, pet services, and many more.
If you want more samples, you can try this (really long) Google search for industry business plan filetype:pdf -template -sample -checklist -outline -format. Just replace industry with your own to find sample PDF business plans.
Business Plan Competitions
Did you know that there are actually business plan competitions annually?
The winners of these competitions get funding for their small business. And the ones that don't still get good publicity and recognition by the organizations they submit them to.
Here are a few examples of the latest business plan competitions for 2013 to give you an idea of the kinds that are out there.
- 2013 National Clean Energy Business Plan Competition Finals
- Rice Business Plan Competition
- Chicago City Treasurer Small Business Plan Competition
- New York Business Plan Competition
- Ohio State University Business Plan Compeition
You can also search for business plan competitions on Google to find ones that are specific to your region or your industry. If you do need funding and have an awesome business plan, this could be a good way to go about getting it.
Have you created a business plan for your business? What did you learn from it?